Could anything be ‘New’ About Capitalism and the Environment?

An opening for ‘environmental debt’

By Peter Burnett

Capitalism is a popular theme in Australian environmental policy at the moment, at least for Liberal governments.

Hardly surprising I suppose. The Liberal Party prides itself on being the natural home of free enterprise.

Addressing a business breakfast last month, Prime Minister Scott Morrison told his audience that ‘We believe climate can be ultimately solved by “can-do capitalism” not “don’t do governments” seeking to control peoples’ lives.

As a three word slogan, ‘can-do capitalism’ would not have rated a further mention in this blog if it were not for the fact that, shortly afterwards, Matt Kean, recently-appointed NSW Treasurer (who also remains, for the time being, Environment Minister) popped up in a media interview spruiking ‘New Capitalism’ as the solution to environmental and other problems.

At first blush, this seemed like nothing more than a bit of political jockeying between two Liberal politicians who have a bit of form in the needling department, as Mr Kean seemed to be taking aim at Morrison.

“I think it [New Capitalism] is very different [to Can-Co Capitalism],” Mr Kean told the Australian Financial Review. “I don’t want to make policies just for a news cycle, I want to make policies for a generation that will build a stronger and more prosperous nation for everyone,” Mr Kean said.

Kean’s ‘New Capitalism’

But there was more to it than that. Mr Kean went on to say that ‘I guess “New Capitalism” is looking at the environmental and social benefits of the decisions we take, not just the financial benefits.’

Still fairly ho hum and hardly new. This amounts to a very weak form of sustainability: ‘sustainable’ in a sense of requiring economic, social and environmental factors to be taken into account, but very weak because it does not require any particular weight to be given to social or environmental factors. Indeed, this formula doesn’t require any weight at all!

However, Kean continued, outlining “five pillars” of his economic portfolio, including “climate and sustainability”. A little more substance, but still just a topic and not really a policy.

Then it got interesting. Kean started talking about there being a once-in-a-generation opportunity to address the big structural issues in the economy. ‘There’s no point leaving our kids with a bucketful of money if we’ve left them with a mountain of environmental debt,’ he said.

What’s ‘environmental debt’?

Now you’re talking Matt. I’ve always thought ‘environmental debt’ was a useful concept, conveying clearly that we have borrowed someone else’s share of nature (the ‘someone else’ being future generations) and must pay it back.

But the term hasn’t been used much in our political discourse, perhaps because it is potentially so powerful and, to my mind, policy-specific.

In fact, the only serious mention of environmental debt I can recall in Australian political discourse comes from 30 years ago, when the Hawke government made reference to the importance of not saddling future generations with environmental debt, in the course of developing the now-long-forgotten National Strategy on Ecologically Sustainable Development.

But why does using up nature create a debt? Because Nature can only produce what each generation of humans needs if there is enough of each of its component ecosystems, its ‘natural capital’, to do so.

Call it ‘critical mass’ if you like. That’s just the way Nature works. Drop below critical mass in any ecosystem and you are in trouble.

This phenomenon has been explained by comparing Nature to an inheritance, coming in the form of a large fund that has been invested.

We can live off the natural ‘dividends’ or ‘ecosystem services’ forever, but if we draw down more than just the dividends, we start eating into the natural capital, condemning future generations to receiving fewer ‘dividends’ (and more trouble) from Nature than we have.

Unfortunately, this is exactly what we have done.

So, if we value our children and grandchildren as much as ourselves, we owe it to future generations to pay back our over-consumption. (As an aside, try arguing against that proposition: Groucho Marx is reported to have said ‘What has posterity ever done for me?’ But he was a comedian.)

And how do we pay back environmental debt? Through environmental restoration. Restoration can come from doing things that build Nature’ capacities (like planting trees) or from reducing things that harm Nature (like carbon emissions).

Don’t forget the accounts

And if Kean is serious about repaying environmental debt, there’s another implication: we need a way to measure it. Banks keep track of their loans by keeping accounts. As I’ve explained before, there is an now an internationally recognised way of keeping environmental accounts, the System of Environmental-Economic Accounts, or ‘SEEA’.

By recording the extent and condition of our ecosystems, and then identifying the minimum of such extent and condition (‘critical mass’) needed to produce the ecosystem services on which we all rely, we can then identify any shortfall as our accumulated ecological debt.

Environmental accounts could also be used to keep track of the gains achieved through environmental restoration, as we reduce the debt.

Going somewhere?

As you can see, that this is dangerous territory for a politician. Talk of environmental debt raises issues that are moral (always tricky), long-term (when most politics goes for the quick fix) and specific (raising the risk of being boxed in, to a potentially-unpopular policy).

But Matt Kean is a highly unusual politician, not only because he comes from the political Right but outdoes the environmental commitment of many on the political Left, but also because he’s been unusually successful in bringing his conservative colleagues along with his pro-environment policies.

In deploying the language of environmental debt, Kean may now be striking out further, into waters that, while not newly discovered, are rarely sailed.

Let’s hope his boldness pays off. Not only for ourselves, but for our children.

Image by geralt at Pixabay

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